BUSINESS PLAN

Insert business/product logo here

(BUSINESS NAME)

INSTITUTIONAL MANAGEMENT ENTERPRISE (IME)

SECTION HMA3
2 SEMESTER - SY 2020-2021
ND
APRIL 2021
TABLE OF CONTENTS
EXECUTIVE SUMMARY...........................................................................................................................4
COMPANY DESCRIPTION...................................................................Error: Reference source not found
PRODUCT, SERVICE, OR IDEA (PSI) DESCRIPTION.......................................................................................5
MARKETING PLAN...........................................................................Error: Reference source not found
SWOT Analysis............................................................................................................................................................8
Competitor Data Collection Plan................................................................................................................................1
Competitive Analysis...................................................................................................................................................1
Marketing Expenses Strategy Chart............................................................................................................................1
Pricing Strategy...........................................................................................................................................................1
Distribution Channel Assessment...............................................................................................................................1
OPERATIONAL PLAN........................................................................Error: Reference source not found
MANAGEMENT AND ORGANIZATION..................................................Error: Reference source not found
Management...............................................................................................................................................................1
Organizational Chart...................................................................................................................................................1
STARTUP EXPENSES AND CAPITALIZATION............................................Error: Reference source not found
FINANCIAL PLAN.............................................................................Error: Reference source not found
APPENDICES...................................................................................Error: Reference source not found
EXECUTIVE SUMMARY
The Executive Summary is the most important part of your business plan. Often, it’s the only part that a
prospective investor or lender reads before deciding whether or not to read the rest of your plan. It
should convey your enthusiasm for your business idea and get readers excited about it, too.

Write your Executive Summary LAST, after you have completed the rest of the business plan. That way,
you’ll have thought through all the elements of your startup and be prepared to summarize them.

The Executive Summary should briefly explain each of the below.

1. An overview of your business idea (one or two sentences).

2. A description of your product and/or service. What problems are you solving for your
target customers?
3. Your goals for the business. Where do you expect the business to be in one year, three
years, five years?
4. Your proposed target market. Who are your ideal customers?
5. Your competition and what differentiates your business. Who are you up against, and
what unique selling proposition will help you succeed?
6. Your management team and their prior experience. What do they bring to the table that
will give your business a competitive edge?
7. Financial outlook for the business. If you’re using the business plan for financing
purposes, explain exactly how much money you want, how you will use it, and how that
will make your business more profitable.

Limit your Executive Summary to one or two pages in total.

After reading the Executive Summary, readers should have a basic understanding of your business,
should be excited about its potential, and should be interested enough to read further.

After you’ve completed your business plan, come back to this section to write your executive summary
on the next page.

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COMPANY DESCRIPTION
This section explains the basic elements of your business. Include each of the below:

1. Company mission statement

A mission statement is a brief explanation of your company’s reason for being. It can be as short
as a marketing tagline (“MoreDough is an app that helps consumers manage their personal
finances in a fun, convenient way”) or more involved: (“Doggie Tales is a dog daycare and
grooming salon specializing in convenient services for urban pet lovers. Our mission is to provide
service, safety and a family atmosphere, enabling busy dog owners to spend less time taking care
of their dog’s basic needs and more time having fun with their pet.”) In general, it’s best to keep
your mission statement to one or two sentences.

2. Company philosophy and vision

a. What values does your business live by? Honesty, integrity, fun, innovation and
community are values that might be important to your business philosophy.
b. Vision refers to the long-term outlook for your business. What do you ultimately want it
to become? For instance, your vision for your doggie day-care center might be to become
a national chain, franchise or to sell to a larger company.

3. Company goals
Specify your long- and short-term goals as well as any milestones or benchmarks you will use to
measure your progress. For instance, if one of your goals is to open a second location, milestones
might include reaching a specific sales volume or signing contracts with a certain number of
clients in the new market.

4. Target market
You will cover this in-depth in the Marketing Plan section. Here, briefly explain who your target
customers are.

5. Industry
Describe your industry and what makes your business competitive: Is the industry growing,
mature or stable? What is the industry outlook long-term and short-term? How will your
business take advantage of projected industry changes and trends? What might happen to your
competitors and how will your business successfully compete?

6. Legal structure
a. Is your business a sole proprietorship, LLC, partnership or corporation? Why did you
choose this particular form of business?
b. If there is more than one owner, explain how ownership is divided. If you have investors,
explain the percentage of shares they own. This information is important to investors and
lenders.

After reading the Company Description, the reader should have a basic understanding of your business’s
mission and vision, goals, target market, competitive landscape and legal structure.

Use the Company Description worksheet on the next page to help you complete this section.
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PRODUCT, SERVICE, OR IDEA (PSI) DESCRIPTION
This section expands on the basic information about your products and services included in the
Executive Summary and Company Description. Here are some items to consider:

1. Your company’s products and/or services: What do you sell, and how is it manufactured or
provided? Include details of relationships with suppliers, manufacturers and/or partners that
are essential to delivering the product or service to customers.
2. The problem the product or service solves: Every business needs to solve a problem that its
customers face. Explain what the problem is and how your product or service solves it. What
are its benefits, features and unique selling proposition? Yours won’t be the only solution
(every business has competitors), but you need to explain why your solution is better than
the others, targets a customer base your competitors are ignoring, or has some other
characteristic that gives it a competitive edge.
3. Any proprietary features that give you a competitive advantage: Do you have a patent on
your product or a patent pending? Do you have exclusive agreements with suppliers or
vendors to sell a product or service that none of your competitors sell? Do you have the
license for a product, technology or service that’s in high demand and/or short supply?
4. How you will price your product or service: Describe the pricing, fee, subscription or leasing
structure of your product or service. How does your product or service fit into the
competitive landscape in terms of pricing—are you on the low end, mid-range or high end?
How will that pricing strategy help you attract customers? What is your projected profit
margin?

Include any product or service details, such as technical specifications, drawings, photos, patent
documents and other support information, in the Appendices.

After reading the Products & Services section, the reader should have a clear understanding of what
your business does, what problem it solves for customers, and the unique selling proposition that makes
it competitive.

Use the Product and Service Description Worksheet on the next page to help you complete this section.

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MARKETING PLAN
This section provides details on your industry, the competitive landscape, your target market and how
you will market your business to those customers.

1. Market research

There are two kinds of research: primary and secondary. Primary market research is information you
gather yourself. This could include going online or driving around town to identify competitors;
interviewing or surveying people who fit the profile of your target customers; or doing traffic counts at a
retail location you’re considering.

Secondary market research is information from sources such as trade organizations and journals,
magazines and newspapers, Census data and demographic profiles. You can find this information online,
at libraries, from chambers of commerce, from vendors who sell to your industry or from government
agencies.

This section of your plan should explain:

 The total size of your industry

 Trends in the industry – is it growing or shrinking?
 The total size of your target market, and what share is realistic for you to obtain
 Trends in the target market – is it growing or shrinking? How are customer needs or preferences
changing?

2. Barriers to entry

What barriers to entry does your startup face, and how do you plan to overcome them? Barriers to entry
might include:

 High startup costs

 High production costs
 High marketing costs
 Brand recognition challenges
 Finding qualified employees
 Need for specialized technology or patents
 Tariffs and quotas
 Unionization in your industry

3. Threats and opportunities

Once your business surmounts the barriers to entry you mentioned, what additional threats might it
face? Explain how the following could affect your startup:

 Changes in government regulations

 Changes in technology

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  Changes in the economy
 Changes in your industry

Use the SWOT Analysis Worksheet on the next page to identify your company’s weaknesses and potential threats,
as well as its strengths and the potential opportunities you plan to exploit.

SWOT Analysis Worksheet

Strengths Weaknesses Opportunities Threats

Product/ Service
Offering

Brand/ Marketing

Staff/HR

Finance

Operations/
Management

Market

Can any of your strengths help with improving your weaknesses or combating your threats? If so, please describe how
below.

Based on the information above, what are your immediate goals/next steps?

Based on the information above, what are your long-term goals/next steps?

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4. Product/service features and benefits

Describe all of your products or services, being sure to focus on the customer’s point of view. For each
product or service:

 Describe the most important features. What is special about it?

 Describe the most important benefits. What does it do for the customer?

In this section, explain any after-sale services you plan to provide, such as:

 Product delivery  Ongoing support

 Warranty/guarantee  Training
 Service contracts  Refund policy

5. Target customer

Describe your target customer. (This is also known as the ideal customer or buyer persona.)

You may have more than one target customer group. For instance, if you sell a product to consumers
through distributors, such as retailers, you have at least two kinds of target customers: the distributors
(businesses) and the end users (consumers).

Identify your target customer groups, and create a demographic profile for each group that includes:

For consumers:
 Age  Income
 Gender  Occupation
 Location  Education level

For businesses:
 Industry
 Location
 Size
 Stage in business (startup, growing,
mature)
 Annual sale

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6. Key competitors

One of the biggest mistakes you can make in a business plan is to claim you have “no
competition.” Every business has competitors. Your plan must show that you’ve identified yours
and understand how to differentiate your business. This section should:

List key companies that compete with you (including names and locations), products that
compete with yours and/or services that compete with yours. Do they compete across the
board, or just for specific products, for certain customers or in certain geographic areas?
Also include indirect competitors. For instance, if you’re opening a restaurant that relies on
consumers’ discretionary spending, then bars and nightclubs are indirect competitors.

Use the Competitor Data Collection Plan on the next page to brainstorm ways you can collect
information about competitors in each category.

Competitor Data Collection Plan

Price

Benefits/Features

Size/profitability

Market strategy

Once you’ve identified your major competitors, use the Competitive Analysis Worksheet
on the next page to compare your business to theirs.

Competitive Analysis
 For each factor listed in the first column, assess whether you think it’s a strength or a
weakness (S or W) for your business and for your competitors. Then rank how important
each factor is to your target customer on a scale of 1 to 5 (1 = very important; 5 = not
very important). Use this information to explain your competitive advantages and
disadvantages.

Competitor Importance to
FACTOR Me Competitor B Competitor C
A Customer

Products

Price

Quality

Selection

Service

Reliability

Stability

Expertise

Company
Reputation

Location

Appearance

Sales Method

Credit Policies

Advertising

Image

7. Positioning/Niche

Now that you’ve assessed your industry, product/service, customers and competition, you
should have a clear understanding of your business’s niche (your unique segment of the
market) as well as your positioning (how you want to present your company to customers).
Explain these in a short paragraph.
8. How you will market your product/service

In this section, explain the marketing and advertising tactics you plan to use.

Advertising may include:

 Online
 Print
 Radio
 Cable television
 Out-of-home

Which media will you advertise in, why and how often?

Marketing may include:

 Business website
 Social media marketing
 Email marketing
 Mobile marketing
 Search engine optimization
 Content marketing
 Print marketing materials (brochures, flyers, business cards)
 Public relations
 Trade shows
 Networking
 Word-of-mouth
 Referrals

What image do you want to project for your business brand?

What design elements will you use to market your business? (This includes your logo, signage
and interior design.) Explain how they’ll support your brand.

9. Promotional budget

How much do you plan to spend on the marketing and advertising outreach above:

 Before startup (These numbers will go into your startup budget)

 On an ongoing basis (These numbers will go into your operating plan budget)

Use the Marketing Expenses Strategy Chart on the next page to help figure out the cost of
reaching different target markets.

Marketing Expenses Strategy Chart

 Target Market 1 Target Market 2 Target Market 3

One-Time Expenses

Monthly or Annual
Expenses

Labor Costs

10. Pricing

You explained pricing briefly in the “Products & Services” section; now it’s time to go into more
detail. How do you plan to set prices? Keep in mind that few small businesses can compete on
price without hurting their profit margins. Instead of offering the lowest price, it’s better to go
with an average price and compete on quality and service.

 Does your pricing strategy reflect your positioning?

 Compare your prices with your competitors’. Are they higher, lower or the same? Why?
 How important is price to your customers? It may not be a deciding factor.
 What will your customer service and credit policies be?

Use the Pricing Strategy Worksheet on the next page to help with your pricing.

Pricing Strategy
Business Name

Which of the following pricing strategies will you employ? Circle one.

Cost Plus Value Based Other:

The costs of making/obtaining your Based on your competitive

product or providing your service, plus advantage and brand (perceived
enough to make a profit value)

Provide an explanation of your pricing model selection.

Include strategy info on your major product lines/service offerings. List industry/market practices and any considerations
to be discussed with your mentor.

11. Location or proposed location

If you have a location picked out, explain why you believe this is a good location for your
startup.

If you haven’t chosen a location yet, explain what you’ll be looking for in a location and why,
including:

 Convenient location for customers

 Adequate parking for employees and customers
 Proximity to public transportation or major roads
 Type of space (industrial, retail, etc.)
 Types of businesses nearby

Focus on the location of your building, not the physical building itself. You’ll discuss that later,
in the Operations section.
12. Distribution channels

What methods of distribution will you use to sell your products and/or services? These may
include:

 Retail
 Direct sales
 E-commerce
 Wholesale
 Inside sales force
 Outside sales representatives
 OEMs

If you have any strategic partnerships or key distributor relationships that will be a factor in
your success, explain them here.

If you haven’t yet finalized your distribution channels, use the Distribution Channel Assessment
Worksheet on the next page to assess the pros and cons of each distribution channel you are
considering.

Distribution Channel Assessment

Distribution Channel 1 Distribution Channel 2 Distribution Channel 3

Ease of Entry

Geographic
Proximity

Costs

Competitors’
Positions
 Management
Experience

Staffing
Capabilities

Marketing
Needs

After reading the Marketing Plan section, the reader should understand who your target
customers are, how you plan to market to them, what sales and distribution channels you will
use, and how you will position your product/service relative to the competition.
OPERATIONAL PLAN
This section explains the daily operation of your business, including its location, equipment,
personnel and processes.

1. Production
How will you will produce your product or deliver your service? Describe your production
methods, the equipment you’ll use and how much it will cost to produce what you sell.

2. Quality control
How will you maintain consistency? Describe the quality control procedures you’ll use.

3. Location
Where is your business located? You briefly touched on this in the Company Overview. In this
section, expand on that information with details such as:

a. The size of your location

b. The type of building (retail, industrial, commercial, etc.)
c. Zoning restrictions
d. Accessibility for customers, employees, suppliers and transportation if necessary
e. Costs including rent, maintenance, utilities, insurance and any buildout or remodeling
costs
f. Utilities

4. Legal environment
What type of legal environment will your business operate in? How are you prepared to handle
legal requirements? Include details such as:

a. Any licenses and/or permits that are needed and whether you’ve obtained them
b. Any trademarks, copyrights or patents that you have or are in the process of applying
for
c. The insurance coverage your business requires and how much it costs
d. Any environmental, health or workplace regulations affecting your business
e. Any special regulations affecting your industry
f. Bonding requirements, if applicable

5. Personnel
What type of personnel will your business need? Explain details such as:

a. What types of employees? Are there any licensing or educational requirements?

b. How many employees will you need?
c. Will you ever hire freelancers or independent contractors?
d. Include job descriptions.
e. What is the pay structure (hourly, salaried, base plus commission, etc.)?
f. How do you plan to find qualified employees and contractors?
g. What type of training is needed and how will you train employees?
6. Inventory
If your business requires inventory, explain:

 What kind of inventory will you keep on hand (raw materials, supplies, finished
products)?
 What will be the average value of inventory (in other words, how much are you investing
in inventory)?
 What rate of inventory turnover do you expect? How does this compare to industry
averages?
 Will you need more inventory than normal during certain seasons? (For instance, a
retailer might need additional inventory for the holiday shopping season.)
 What is your lead time for ordering inventory?

7. Suppliers
List your key suppliers, including:

 Names, addresses, websites

 Type and amount of inventory furnished
 Their credit and delivery policies
 History and reliability
 Do you expect any supply shortages or short-term delivery problems? If so, how will you
handle them?
 Do you have more than one supplier for critical items (as a backup)?
 Do you expect the cost of supplies to hold steady or fluctuate? If the latter, how will you
deal with changing costs?
 What are your suppliers’ payment terms?

8. Credit policies
If you plan to sell to customers on credit, explain:

 Whether this is typical in your industry (do customers expect it)?

 What your credit policies will be. How much credit will you extend? What are the
criteria for extending credit?
 How will you check new customers’ creditworthiness?
 What credit terms will you offer?
 Detail how much it will cost you to offer credit, and show that you’ve built these costs
into your pricing structure.
 How will you handle slow-paying customers? Explain your policies, such as when you
will follow up on late payments, and when you will get an attorney or collections agency
involved.

After reading the Operational Plan section, the reader should understand how your business
will operate on a day-to-day basis.
MANAGEMENT AND ORGANIZATION
This section should give readers an understanding of the people behind your business, their
roles and responsibilities, and their prior experience. If you’re using your business plan to get
financing, know that investors and lenders carefully assess whether you have a qualified
management team.

1. Biographies
Include brief biographies of the owner/s and key employees. Include resumes in the
Appendix. Here, summarize your experience and those of your key employees in a few
paragraphs per person. Focus on the prior experience and skills that have prepared your
team to succeed in this business. If anyone has previous experience starting and
growing a business, explain this in detail.

2. Gaps
Explain how you plan to fill in any gaps in management and/or experience. For instance,
if you lack financial know-how, will you hire a CFO or retain an accountant? If you don’t
have sales skills, will you hire an in-house sales manager or use outside sales reps?

3. Advisors
List the members of your professional/advisory support team, including:
a. Attorney
b. Accountant
c. Board of directors
d. Advisory board
e. Insurance agent
f. Consultants
g. Banker
h. Mentors and other advisors

If they have experience or specializations that will increase your chances of success, explain. For
instance, does your mentor have experience launching and growing a similar business?

4. Organization Chart
Develop and include an organization chart. This should include both roles that you’ve
already filled and roles you plan to fill in the future.

After reading the Management & Organization section, the reader should feel confident that
you have a qualified team leading your business.

Use the Management Worksheet and Organization Chart on the next two pages to highlight your
management team

Management
 Bio/s

Gaps in Management
or Experience

Advisors
 TITLE

TITLE TITLE TITLE

TITLE

TITLE TITLE TITLE

TITLE TITLE TITLE

TITLE TITLE

Organizational Chart
STARTUP EXPENSES AND CAPITALIZATION
In this section, detail the expenses involved in opening for business and how much capital you’ll
need. (Do not include ongoing expenses after your business opens; those are listed in the
Financial Plan.) Estimating startup expenses as accurately as possible helps you gather enough
startup capital.

1. Start-Up Expenses
Download and complete the Start-Up Expenses template. In working on this Business
Plan, you should already have gathered most, if not all, of the information you need. In
the body of this section, be sure to explain all of the assumptions behind the figures.
How did you come up with these expenses? If you’ve secured or expect to secure loans,
explain the source/s, amount/s and terms. If you’ve secured or expect to secure
investors, explain how much each investor will contribute and what percentage of
ownership each receives in return.

Be sure to include extra capital for unexpected expenses. Opening a new business
almost always ends up costing more than expected, and you need to be prepared. List
this figure in the Start-Up Expenses template under “Reserve for Contingencies.” How
much should you set aside for contingencies? You can talk to other business owners in
your industry to get a ballpark figure. If you can’t come up with a figure this way, a good
rule of thumb is to set aside 20% to 25% of your total startup costs for contingencies.

2. Opening Day Balance Sheet

Download and complete the Opening Day Balance Sheet. Use it to detail the expected
state of your business finances on opening day. As with the Start-Up Expenses sheet, be
sure to explain the assumptions behind the figures.

3. Personal Financial Statement

If you are using the business plan to seek financing, include personal financial
statements for each owner and each major stockholder. The personal financial
statements should detail each person’s assets and liabilities outside of the business and
their personal net worth. Investors and/or lenders typically expect business owners to
use personal assets to finance a startup, and they’ll want to see how much capital you
have available from your personal finances.

After reading the Startup Expenses & Capitalization section, the reader should know how much
money is needed to start the business and how well capitalized you are.
FINANCIAL PLAN
Your financial plan is perhaps the most important element of your business plan. Lenders and
investors will review it in detail. Developing your financial plan helps you set financial goals for
your startup and assess its financing needs. Include the following:

1. 12-month profit & loss projection

Also known as an income statement or P&L, the 12-month profit and loss projection is
the centerpiece of your business plan. Download the 12-Month Profit and Loss
Projection and fill in your projected sales, cost of goods sold and gross profit. (Refer to
the Sales Forecast you created in Section IV). Then list your expenses, net profit before
taxes, estimated taxes and net operating income.

Be sure to explain the assumptions behind the numbers in your P&L. Keep detailed
notes about how you came up with these figures; you may need this information to
answer questions from potential financing sources.

2. Cash flow projection

The cash flow statement tracks how much cash your business has on hand at any given
time. Once your business is up and running, you’ll want to keep close tabs on your cash
flow statement. For now, however, you’re creating a cash flow projection. Think of the
cash flow projection as a forecast for your business checking account. It details when
you need to spend money on things such as inventory, rent and payroll, and when you
expect to receive payments from customers and clients. For example, you may make a
sale, have to buy inventory to fulfill the sale, and not collect payment from the customer
for 30, 60 or 90 days. The cash flow projection takes these factors into account, helping
you budget for upcoming expenses so your business doesn’t run out of money.

Download the 12-Month Cash Flow Statement and use it to create your projections.

3. Projected balance sheet

A balance sheet subtracts the company’s liabilities from its assets to arrive at the
owner’s equity. You already created an opening day balance sheet in Section 1. Now,
download the Balance Sheet (Projected), and create a projected balance sheet showing
the estimated financial condition of your business at the end of its first year. The major
difference between the two is that the projected balance sheet includes any owner’s
equity resulting from the business’s first year in operation. Lenders and investors may
want to see this projection.

4. Break-even calculation
The break-even analysis projects the sales volume you need in order to cover your costs.
In other words, when will the business break even? Download the Break-Even Analysis
template and, using your profit and loss projections, enter your expected fixed and
variable costs. Adjust the categories to reflect your own business.
 You can even create a couple of different break-even analyses for different scenarios.
For example, your payroll costs will vary depending on whether you hire full-time
employees or use independent contractors. Creating different break-even analyses can
help you determine the best option.

5. Use of capital
If you’re using the business plan to seek financing from lenders or investors, provide a
breakdown of how you will the capital and what results you expect. For example,
perhaps you will use the money to buy new equipment and expect that to double your
production capacity.

After reading the Financial Plan section, the reader should understand the assumptions behind your
financial projections and be able to judge whether these projections are realistic.
APPENDICES
Don’t slow your readers down by cluttering your business plan with supporting documents,
such as contracts or licenses. Instead, put these documents in the Appendices, and refer to
them in the body of the plan so readers can find them if needed.

Below are some elements many business owners include in their Appendices.

1. Agreements (Leases, contracts, purchase orders, letters of intent, etc.)

2. Intellectual property (trademarks, licenses, patents, etc.)
3. Resumes of owners/key employees
4. Advertising/marketing materials
5. Public relations/publicity
6. Blueprints/plans
7. List of equipment
8. Market research studies
9. List of assets that can be used as collateral

You can also include any other materials that will give readers a fuller picture of your business
or support the projections and assumptions you make in your plan. For instance, you might
want to include photos of your proposed location, illustrations or photos of a product you are
patenting, or charts showing the projected growth of your market.

After reviewing the Appendices, the reader should feel satisfied that the assumptions
throughout the plan are backed up by documentation and evidence.
AUTHORIZATION
S